Traders oppose LBT, say CM’s solutions not viable

The Federation of Associations of Maharashtra (FAM) will intensify its campaign for the removal of Local Body Tax (LBT) if the government fails to implement an alternative model of creating a single-point taxation system suggested by them.

Earlier this year, the traders’ association had proposed an alternate source of revenue in lieu of octroi or LBT whereby the government could get more revenue by merely increasing the value added tax (VAT) by one per cent. Currently the government earns close to Rs Rs 60,000 crores through VAT, with the implementation of the single-point taxation, the revenue can go up to Rs 72,000 crore, the traders claim.

“They are not ready to consider our option of subsuming LBT with Value-Added Tax (VAT). All we are asking for is a simplified, single-point taxation which will make trade easier for us and avoid many levels of assessment, which will lead to nothing but a corrupt regime,” said Mohan Gurnani, President of FAM.

In a meeting with the traders’ body last week, Chief Minister Prithviraj Chavan had suggested three solutions to the members, wherein LBT could be replaced with octroi again, wherein the State will continue with a multiple taxation system and the sales tax department of the State will be responsible for collecting the tax instead of the civic body.

“We do not agree to any of these conditions. The government has to realise that we are opposing the concept of the tax itself and not the modality. The traders have always maintained that we do not have a problem with paying taxes, but we want to avoid the creation of a licence Raj again,” said Sanjay Mehta of the Small Scale Entrepreneurs Association.

The association has also written to the Chief Minister with a fax copy of a notice by assessing authority to a dealer in Parbhani, in Marathwada. “The dealer has been asked to submit close to 16 documents by the Parbhani Municipal Corporation. This is a clear case of harassment. Neither can a small trader carry so many documents all the time nor can he appoint a chartered accountant who will look into all these finances,” Gurnani added.

Earlier in June, the BJP had warned of the government of intensifying its agitation against LBT if the Maharashtra government failed to abolish it in the next 10 days.